"CFTC Proposed Regulation AT"

On February 23, 2016, the Commodity Futures Trading Commission (“CFTC”) held a public meeting that included discussion of the CFTC’s notice of proposed rulemaking (“Proposed Regulation AT”) with respect to algorithmic trading on U.S. designated contract markets (“DCMs”) through clearing member futures commission merchants (“FCMs”).  Proposed Regulation AT would require risk controls, transparency measures, minimum compliance standards and other safeguards in order to account for new technology, increase the transparency of the coding process and mitigate the risks inherent in algorithmic trading.  The period for public comment on Proposed Regulation AT will expire on March 16, 2016.

This Stroock Special Bulletin addresses the scope and potential consequences of Proposed Regulation AT for entities engaged in algorithmic trading.